High spectrum fee will lead to tariff hike: COAI to EGoM

New Delhi: Ahead of the scheduled meeting of EGoM on telecom on Friday, GSM industry body COAI has written to the panel's head, Home Minister P Chidambaram, that the new model being considered to fix spectrum base price will lead to hike in tariffs.

"By changing the payment model to lower upfront charges, higher revenue share...Will not address the fundamental issue that the price is unsustainable and will significantly increase cost and thus invariably tariffs," COAI's Director General Rajan S Mathews wrote in the letter.

The Empowered Group of Ministers is scheduled to meet on Friday to take a view on spectrum pricing which may be referred to Union Cabinet for final decision.

According to sources, DoT has been asked to prepare a matrix of various levels of reserve price and spectrum usage charge.

The reserve price in the matrix is likely in the range of Rs 12,000 crore to Rs 18,000 crore and its impact analysis will be calculated on spectrum usage charge in the range of 3 to 8 percent, sources added.

also raised concern on the government considering increase in Spectrum Usage Charge (SUC) to 8 percent, which is annually levied on telecom operators.

"EGoM's consideration of increasing spectrum usage charge (SUC) to 8 percent - a killer for the industry," he said.

The Cellular Operators Association of India's DG said it will adversely impact the national objective of 'connecting the unconnected' as high payment for spectrum will be at the cost of further rollout and deployment of network.